Amazon Begins Collecting Sales Tax in Ohio

After announcing that it will be building three datacenters in Ohio, online retail giant Amazon began collecting sales tax on online orders placed from Ohio after June 1, 2015. This is a result of the JobsOhio deal between Amazon and the state of Ohio, and is expected to generate between $150 million and $300 million in tax revenue for Ohio each year. The deal is also bringing about 1,000 new jobs to Ohio with regards the aforementioned datacenters. Amazon has agreed to build the data centers in Dublin, Hilliard and New Albany.

Brick and mortar retail stores are thrilled with this development, as now they can be more competitive with the online retailer. Retailers and associations have spent years trying to persuade Congress to pass laws requiring online retailers to collect the same state taxes that brick-and-mortar stores do. For the third time lawmakers have introduced The Marketplace Fairness Act to close the loophole.

The additional revenue will be beneficial to Ohio’s budget, and hopefully, we the consumers will see a trickle-down effect as Governor Kasich has said that he would like to shift the tax burden off individual income taxes. Without collecting Ohio’s 5.75% sales tax, the state had to rely on the honor system. In the year 2012 alone, taxpayers reporting their untaxed Amazon and/or mail-order purchases converted to 50,000 of Ohio’s 5-million-plus taxpayers voluntarily handing over only $3 million in sales tax.